REVISED December 9, 2013

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-20192

Summary Calendar

NOEL T. CONNELL,

Plaintiff – Appellant

v.

CITIMORTGAGE, INCORPORATED; HUGHES, WATTERS, & ASKANASE, 

L.L.P.,

Defendants – Appellees

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:12-CV-3265

Before REAVLEY, JONES and PRADO, Circuit Judges.

PER CURIAM:*

Appellant Noel T. Connell filed a state court suit on the eve of 

CitiMortgage, Incorporated’s (“CMI”) scheduled foreclosure of his house. He 

joined Appellees CMI and Hughes, Watters, & Askanase (“HWA”), the law firm 

that made demand for his nonpayment of amounts allegedly due. CMI 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

November 18, 2013

Lyle W. Cayce

Clerk

 

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No. 13-20192

removed the case to the federal district court, arguing that the law firm was 

fraudulently joined in the suit, rendering irrelevant its citizenship for diversity 

purposes. Borden v. Allstate Ins. Co., 589 F.3d 168, 171 (5th Cir. 2009). Soon 

afterward, the district court set a pretrial conference to discuss the case. 

Immediately before the conference, Connell moved to remand because the law 

firm is also a Texas resident whose joinder as a defendant destroyed complete 

diversity.

During the hearing, it became clear that the court had not read and did 

not take time to review the just-filed motion to remand, nor did the court follow 

Appellees’ arguments. Instead, the court characterized Connell’s suit as 

arising under federal question jurisdiction, and it wrongly equated Connell’s 

pleadings alleging violations of the Texas Finance Code with pleadings under 

the federal Fair Debt Collection Practices Act. On this basis alone, the court 

denied remand. Summary judgment was later awarded to the Appellees.

This court has been placed at a disadvantage on appeal. Because the 

issue of fraudulent joinder goes to the court’s jurisdiction, we review it de novo. 

La. ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 425 (5th Cir. 2008). We 

cannot approve the trial court’s methodology, however, which ignored the 

parties’ pleadings and arguments in favor of its own creative evaluation of the 

case. We must therefore start over without the benefit of a reliable district 

court ruling.

First, the question of diversity jurisdiction is reviewed based on the 

pleadings at the time of removal. Cavallini v. State Farm Mu. Auto Ins. Co., 

44 F.3d 256, 264 (5th Cir. 1995). Second, in addressing a claim of fraudulent 

joinder, the question is whether there is no possibility that the plaintiff could 

prevail on a claim asserted against an in-state defendant. Travis v. Irby, 326 

F.3d 644, 647 (5th Cir. 2003).

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Connell acknowledges that his state court pleading asserted the wrong 

section of the Texas Finance Code as the basis of a claim against the law firm, 

which is not a “credit bureau.” Cf. Tex. Fin. Code § 392.201 with § 392.202. 

Connell did not seek to cure this pleading defect until after Appellees’ motions 

for summary judgment had been filed. His state court pleading must be the 

operative pleading for analysis of diversity jurisdiction. Because Connell’s 

pleading relied on an inapposite statutory provision, there was “no possibility” 

that he could prevail against the law firm on this claim. There was also no 

reasonable possibility that Connell would recover against the law firm under 

asserted claims applying specifically to debt collectors. See Tex. Fin. Code 

§§ 392.303(a)(2) and 392.304(a)(8). The Texas Finance Code specifically 

excludes “an attorney collecting a debt as an attorney on behalf of and in the 

name of a client” from the meaning of debt collector, and Connell did not allege 

in his pleadings that the law firm qualified as a debt collector under the two 

exceptions to this exclusion. See Tex. Fin. Code § 392.001(7). Therefore, 

jurisdiction was proper in the federal court.

The remainder of the proceeding against Connell, although short-lived, 

shows no reversible error. The court did not abuse its discretion in rejecting 

his amended pleading. Ballard v. Devon Energy Prod. Co., 678 F.3d 360, 364 

(5th Cir. 2012). Connell had been placed on notice immediately upon the filing 

of the removal that CMI claimed fraudulent joinder, and he knew the reason 

was the mischaracterization of the law firm’s status under state law. Yet he 

waited three months, until after the summary judgment motions and his 

responses had been filed, to amend and state a different provision of the Texas 

Finance Code relevant to the law firm’s conduct. The court was not required 

to stop in midstream for Connell to amend his pleadings.

Because Connell challenges only the court’s procedure and not its 

substantive summary judgment ruling, we do not consider the merits of the 

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ruling. The record of the hearing displays the court’s verbally articulated 

reasoning in granting summary judgment; the reasoning was sufficiently clear 

and connected to the Appellees’ motion that Connell is not prejudiced in any 

way by the absence of a written opinion. The court did not abuse its discretion 

in ruling on the record rather than by writing an opinion. See Brumley Estate 

v. Iowa Beef Processors, Inc., 704 F.2d 1351, 1359 (5th Cir. 1983).

For these reasons, the judgment against Appellant is AFFIRMED.

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